Luxury fashion house loses trademark infringement case

In Consitex SA v TCL Marketing Sdn Bhd ([2008] MLJU 0101, unreported, March 8 2008), the newly established Malaysian IP Court has dismissed Consitex SA's trademark infringement and passing off claims against TCL Marketing Sdn Bhd.
Consitex SA, which is part of the Zegna Group, owns the trade names and registered trademarks ERMENEGILDO ZEGNA and ZEGNA in Malaysia for goods in Class 25 of the Nice Classification (clothing, boots, shoes and slippers). Consitex claimed to have used these trade names and trademarks through its franchisees in Malaysia in respect of menswear since 1989. TCL Marketing Sdn Bhd, a Malaysian company, sold garments under the mark EMMER ZECNA. It applied to register the mark EMMER ZECNA (and design) for goods in Classes 16 and 25. Consitex opposed the application (the opposition proceedings are still pending).
Consitex subsequently filed suit against TCL Marketing alleging trademark infringement and passing off.
The IP Court had to decide whether TCL Marketing's EMMER ZECNA mark so nearly resembled Consitex's ERMENEGILDO ZEGNA mark as to be likely to deceive or cause confusion among consumers. In reaching its decision, the court assessed the visual and aural similarity between the marks, and took into account the following circumstances, among others:
  • the way in which the marks are used in the marketplace; 
  • the channels of distribution of the goods; 
  • the targeted markets; and  
  • the characteristics of the average consumer.
The court assessed the marks in their entirety and concluded that ERMENEGILDO ZEGNA and EMMER ZECNA differed both aurally and visually. The court also observed that Consitex's and TCL Marketing's goods were priced differently and targeted different segments of the public (ie, high-end consumers for the ERMENEGILDO ZEGNA mark and middle-class consumers for the EMMER ZECNA mark). Moreover, ERMENEGILDO ZEGNA-branded goods were sold only in exclusive shopping centres and high-end retail outlets (where EMMER ZECNA-branded goods were not present). The court also took into account the fact that the average Malaysian consumer is highly literate, discerning and observant, and hence would be able to distinguish between Consitex's and TCL Marketing's trademarks and businesses.
Therefore, the court held that Consitex had failed to establish the elements of passing off, holding that:
  • the ERMENEGILDO ZEGNA mark was not well known to the general public; 
  • any goodwill attached to the ERMENEGILDO ZEGNA mark was minimal and applied only in relation to a small section of the public; and
  • there was no misrepresentation by TCL Marketing. 
It is interesting to note the manner in which the court handled the evidence presented before it in reaching its decision. First, the court considered that the significant difference in price between Consitex's and TCL Marketing's goods was a strong determining factor. Further, the court refused to rely on the results of a market survey provided by Consitex whereby 195 out of 276 interviewees (ie, over 70%) thought that EMMER ZECNA-branded products were associated with, or related to, the ERMENEGILDO ZEGNA mark. The court based its decision on the following grounds:
  • the questions posed to the interviewees were one-sided and biased; 
  • the answers of the interviewees were not recorded verbatim
  • none of the interviewees were called to give evidence; and  
  • the questions were asked in English, which is not the first language of the majority of Malaysians.  
Having regard to all the relevant factors and available evidence, the court was not convinced that consumers would be deceived or confused by the use of the EMMER ZECNA mark. The court concluded that Consitex should not have a monopoly over the use of Italian-sounding trade names for clothing; the court emphasized "the practicalities of the commercial market today, where many trademarks co-exist peacefully”.
The decision has been appealed.
Joshinae Wong, Skrine, Kuala Lumpur

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